I think it was the Lars Larsen show that started the idea that Lay is still alive and well living off his ill gotten gains.
The logic is that GWB could not afford to pardon him and even if he did pardon Ken, there were still the fines and penalties he owed. Dying wiped out those obligations. Also, if he spent his time moving his money from US banks to offshore accounts, he would be very well to do indeed.
I want to up the ante, CSI style, and guess the MI and death was a fake but that his family looked at the loot he had stashed and cremated him anyway, still alive and kicking so they get a larger cut.
I think I have a made for TV movie in the works here............